13/03/2018

Companies 'Failing' To Deal With Climate Change Risk

Fairfax - Ruth Williams

Too many big Australian companies are failing to reveal plans for tackling climate change or to explain how climate change may impact their businesses, according to new research.
The report, to be released Wednesday by climate NGO Market Forces, is based on public information from 73 big listed companies operating in sectors considered high-risk on climate change.
It found that 84 per cent of the companies had not released a plan to reduce their greenhouse gas emissions, 60 per cent did not have an emissions reduction target, and less than half had identified climate change as a material business risk.
APRA has warned of the financial risks of climate change.
Market Forces is now calling for the disclosure of climate change-related risks to be made mandatory for companies, saying too many were failing to adhere to voluntary standards.
“This is a stark reminder that while Australian companies largely acknowledge the need to decarbonise, they are dragging their feet on implementing concrete steps to actually manage climate risk,” said Market Forces analyst Dan Gocher, the report's author.
“For many companies, climate change poses a material risk to shareholder returns so we expect to see investors stepping up to the plate to hold companies to account.”
The research follows last year's release of guidelines nailed down by the G20's Financial Stability Board taskforce on Climate-related Financial Disclosure, known as the TCFD, which have been endorsed by big investors world-wide and companies including BHP, AGL and National Australia Bank.
The guidelines push companies to disclose climate change risks using different scenarios for how the world may deal with climate change, focusing on the Paris agreement's pledge to keep global warming to "well below" 2 degrees.
Regulators in Australia and elsewhere have been warning of the risks posed by climate change to the global financial system, with the Australian Prudential Regulation Authority encouraging financial institutions to run stress tests on climate risk scenarios. But the Market Forces research shows that that only 10 of the 73 companies examined had published some form of scenario analysis.
Among the companies examined, Mr Gocher said AGL, BHP, Santos, South32 and Aurizon had made most comprehensive public disclosures, while among the big four banks Westpac and ANZ were "marginally ahead of the others".
But Market Forces highlighted many companies it says need to improve, including petrol retailer and supplier Caltex - among many that had not yet disclosed emissions reduction plans or targets - supermarket giant Woolworths, which had not yet produced scenario ​analysis or an emissions reduction plan; and financial institutions including Bendigo and Adelaide Bank; which had not disclosed potential risks and benefits posed by climate change to the company's operations or discussed whether climate change posed a material risk.
Some of the companies have promised more disclosure soon. Caltex said it would be disclosing a "range of actions" related to climate risk in its upcoming annual report, while Woolworths said had already pledged to do more work "assessing the impacts of a two-degree world and their applicability to our group", saying more would be disclosed in its 2018 Corporate Responsibility Report.
Bendigo and Adelaide Bank pointed to its long-time disclosure of carbon emissions and its practice of not lending to projects in the coal and coal seam gas sectors.  "The above actions have come about as a result of ongoing discussions within the group about the potential of climate change to impact our business and we will continue to have these discussions," it said.
The Australian Securities and Investments Commission is currently monitoring companies' climate risk reporting practices, with the Turnbull government last week backing, in principle, a senate committee recommendation that ASIC review its guidance on risk reporting to ensure it adequately reflected "evolving asset measurement implications of carbon risk".
The Market Forces research assesses companies' disclosure across eight measures, including whether they had released a carbon emissions target and a plan for how those reductions would be achieved, who in the company carried responsibility for climate change risk, and whether the company considered climate change to be a material risk.

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'Vulnerable': Climate Change Threatens Wollongong Homes, WIN Stadium

Fairfax - Peter Hannam

Dozens of homes and public assets, including a home ground of the St George Illawarra Dragons, are at risk from rising sea levels and inundation along the Illawarra coastline, according to a management plan drawn up by the Wollongong City Council.
The council's coastal zone management plan, part of which was gazetted by the Berejiklian government on Friday, identified Thirroul beach as being particularly exposed, with as many as 71 properties vulnerable.
Thirroul beach, looking south towards Wollongong, faces climate change threats, the council says.
City mayor Gordon Bradbery said the council had engaged extensive studies based on a projected sea-level rise of 0.4 metres by 2050 and 0.9 metres by 2100.
The region also faced more intense rainfall events producing flooding run-off from the Illawarra escarpment, a range that comes within about half a kilometre of the beach at its closest.
"We've got some challenges - we're already experiencing climate change," Cr Bradbery said.
The council had already begun placing notifications on the most vulnerable properties, "making the risks known to anybody buying into the area", he said, adding the process "had brought a lot of grief".
"We were one of the first councils to get this work done," Cr Bradbery said.
The gazetting of the plan comes as the government is understood to be nearing the long-awaited promulgation of the state's new coastal management plan.
Introduced by the then planning minister Rob Stokes in mid-2016, coastal communities have been waiting for the new act to come into force. Changes will include the introduction of a more powerful Coastal Council with engineering expertise to scrutinise programs to improve the management of coastal risks.
Jeremy Buckingham, the Greens climate spokesman, said Wollongong's report "should be a wake-up call" for NSW.
“The Berejiklian government has pigeon-holed climate change as an environmental issue, but this report demonstrates its far reaching impacts for our economy, planning system and way of life,” he said.
The gazetted report examined the economic options for Thirroul, for instance, and concluded that a “[p]lanned retreat would result in the greatest net benefit per dollar (capital and maintenance costs) invested".
At high or extreme risk in the region included the NRL venue of WIN Stadium, 19 other recreational facilities, and important coastal vegetation.
Other public assets at risk included 12 roads and three carparks, 13 surf clubs and public buildings and 29 stormwater outlets and pipes, the report noted.
Cr Bradbery said the challenges were also compounded by an increase in the area's population as people exit Sydney.
The West Dapto land release, for instance, will house more than 50,000 people in a flood plain crisscrossed with creeks. Only 40 per cent of the available land was deemed safe for residents, he said.
The council would aim to acquire the most vulnerable residences as they came on to the market, level them and turn them into public land, Cr Bradbery said.

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